Traders were left stunned on Thursday as the Nigerian naira traded weaker on the black market to 375 against the dollar. The Naira crossed 300 to the dollar for the first time on the inter-bank market after the Central Bank last month lifted its peg on the currency to allow it trade freely.
The inter-bank market traded a total of $7.27 million and after the market closed, a total of $7.10 million trades were done as low as 330.50 naira to the dollar.
The sharp depreciation was triggered by increased scarcity of the nation’s currency in the inter-bank market. The lack of dollar supply in the interbank market was aggravated by lack of intervention dollar sales by the Central Bank of Nigeria (CBN) causing the naira depreciate by 12 in the market in the last ten days.
Traders who were expecting the Central Bank to intervene and ease dollar shortages were left in their wake as the Central Bank instead mopped up Naira liquidity.
According to the Central Bank’s official website on Friday morning, Inflation is at 16.48 while U.S Dollar Exchange rate is at 292.4.